Essay
Logistics Inc is considering buying an new cube van for $150 000 which will have a scrap value of $10 000 after its 8 year life. The total savings due to the new van compared with continuing without will be $12 000 the first year increasing by $6 000 each year thereafter. The total extra costs due to the van is estimated to be $5 000 per year. Logistics Inc has a MARR of 10%. Using the IRR for Independent Projects method determine if the van should be purchased.
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